Inflation in Japan Hits Its Highest Level of the Year.
Inflation has been driven by the weaker yen, which has increased import costs, and the indirect effects of energy prices.
Japan’s core inflation rose to 2.1% in September, reaching its highest level of the year. In August, the figure stood at 1.7%. The increase was driven by the weaker yen, which raised import costs, and the indirect effects of energy prices.
Core inflation, which excludes fresh food prices, was in line with economists’ expectations. The inflation measure closely monitored by the Bank of Japan (BOJ), which excludes both fresh food and energy prices, stood at 2.4%.
Abhijit Surya, chief Asia-Pacific economist at Capital Economics, said inflation had accelerated despite a significant slowdown in food inflation and a sustained decline in energy prices. Although rice prices fell 20.6% year-on-year, overall goods inflation increased from 2.6% in August to 2.8% in September. Inflation in other industrial goods reached a 13-month high of 3.9%.
Government subsidies helped energy prices decline by 0.6% year-on-year in September.
Japan’s benchmark Nikkei 225 stock index fell 1.62% on Friday. Meanwhile, the yen strengthened against the US dollar, reaching 156.15 yen per dollar.